Not upheld: unfair credit relationship (Section 140A CCA), section 75 claim rejection, alleged misrepresentation, alleged breach of contract, undisclosed commission, inadequate creditworthiness checks, improper sales pressure complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr and Mrs S purchased a Fractional Club timeshare membership for £35,280 (£14,780 cash after trade-in) financed by a loan from Shawbrook Bank in March 2014, which they repaid within weeks. They later complained that the Supplier had misrepresented the product, failed to disclose they would lose their Home Week Priority benefit, improperly pressured them, and that the Lender had failed to conduct proper creditworthiness checks and had not disclosed a commission payment. The ombudsman found the Section 75 claim failed due to the purchase price exceeding £30,000, and that the Section 140A unfairness claim was not established because the alleged misrepresentations were not substantiated, the omitted information did not prejudice their decision, there was no evidence of improper pressure or unaffordable lending, and the undisclosed commission of 7.96% was not sufficiently high to render the relationship unfair. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a multi-layered analysis. First, Section 75 claims failed because the purchase price (£35,280) exceeded the £30,000 threshold. Second, regarding Section 140A unfairness claims: (1) alleged misrepresentations were not established as the paperwork contained qualifications about the 15-year end date and the Supplier's policies indicated other exit options were offered; (2) the omitted information about losing Home Week Priority, while potentially misleading, did not prejudice the decision as Mr and Mrs S rarely used this benefit; (3) insufficient evidence of improper pressure given they had a 14-day cooling-off period they did not exercise; (4) no evidence the lending was unaffordable; (5) the Supplier did not market the product as an investment in breach of Regulation 14(3) as Mr and Mrs S's own initial account did not suggest they expected a profit; (6) the commission of £1,182.40 (7.96% of amount borrowed) was not high enough to render the relationship unfair, particularly when compared to the 55% commission in the Johnson case, and Mr and Mrs S would have proceeded with the loan regardless of disclosure; (7) the Supplier did not owe a fiduciary duty to Mr and Mrs S when acting as credit broker. The ombudsman gave minimal weight to the Alternate Statement due to questionable provenance and late emergence.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website